Dollar Rallies as U.S 10-Year Auction High Yield Declines
Dollar rallies as U.S Treasury’s 10-year auction hit a high yield of 1.338% on Wednesday, down from the 1.34% high in the previous auction. The bid to cover ratio for the auction was 2.59, below the 2.65 ratio in the previous auction.
Dealers represented 55.15% of the bids, with direct bidders at 11.36% and indirect bidders at 33.49%. For takedown, bidders took 12.32%, with direct bidders at 16.62% and indirect were awarded 71.05%
The dollar rallied in early U.S trade on Wednesday, with risk aversion lifting the DXY to near two-week highs of 92.86 from 92.61 earlier.
Concerns about rising COVID cases Treasury yields higher, while job openings surged to a record level in July, though actual hiring lags. Thursday’s US schedule includes more Federal Reserve speakers, as well as weekly initial claims and oil and natural gas stock levels.
A quick summary of foreign exchange action on Wednesday shows that EUR-USD managed to hold the 1.1800 marks, bottoming at 1.1802 before bouncing to 1.1820 as the dollar moved higher on a shift away from risk.
GBP-USD fell for a third straight day, hitting a two-week low of 1.3727 before rebounding to 1.3785 later Wednesday.
There have been some signals from the Bank of England that the current level of stimulus is unnecessary at this point, but moderating economic data and rising COVID cases, with the possibility of short lockdowns, should keep the BOE from tightening policy in the near term.
USD-JPY printed four-week highs of 110.45 from a 110.15 bottom earlier in the day. In the near term, an expected increase in stimulus measured from the Japanese government due to the rising COVID cases in Asia could push the yen higher.
USD-CAD dipped briefly following the Bank of Canada announcement, where no changes were made to rates or asset purchase levels but rebounded and eventually moved to two-week highs of 1.2762 before settling back to 1.2650.
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Dollar Rallies as U.S 10-Year Auction High Yield Declines
